19 November 2025 Legal Updates

SUPREME COURT RECALLS 'VANASHAKTI' JUDGMENT WHICH BARRED GRANT OF POST-FACTO ENVIRONMENTAL CLEARANCES; JUSTICE BHUYAN DISSENTS

(a) Case Title:

• Confederation of Real Estate Developers of India (CREDAI) vs. Vanashakti & Anr.

(b) Court: 

• Supreme Court of India

(c) Date of Decision: 

• November 18, 2025

(d) Bench:

• B.R. Gavai, CJI, Ujjal Bhuyan, J., K. Vinod Chandran, J. 

Background

• The Environment (Protection) Act, 1986 is the primary law for environmental protection in India. Under this Act, the government issued the Environment Impact Assessment (EIA) Notification, 2006, which mandates that certain projects must obtain a prior Environmental Clearance (EC) before they can start construction or operation.
• In 2017, the government introduced a new notification that allowed projects that had already started or were completed without a prior EC to apply for an Ex-Post Facto EC (clearance after the fact). This was intended as a one-time measure.
• Later, in 2021, an Office Memorandum (2021 OM) was issued, creating a Standard Operating Procedure (SOP) for granting such ex-post facto clearances.
• In a judgment dated May 16, 2025 (referred to as "JUR" or the "Vanashakti Judgment"), a 2-judge bench of the Supreme Court struck down the 2017 Notification and the 2021 OM. It held that the concept of ex-post facto EC is "completely alien to environmental jurisprudence." However, it protected ECs that had already been granted under these provisions.
• CREDAI, a body of real estate developers, filed this Review Petition asking the Supreme Court to recall its own "Vanashakti Judgment."

Key Legal Issues Involved

• Whether the "Vanashakti Judgment" should be reviewed and recalled?
• Whether the concept of Ex-Post Facto Environmental Clearance is permissible under Indian environmental law?
• What is the importance of Judicial Discipline and Stare Decisis (following precedents) when a bench of equal strength disagrees with a previous judgment?
• What should be the court's approach when a judgment leads to drastic consequences like the demolition of large, completed public projects?

1. Arguments of the Petitioners (CREDAI, supported by Union of India & others):

• The "Vanashakti Judgment" failed to consider crucial paragraphs from earlier Supreme Court cases like Common Cause, Alembic Pharmaceuticals, and Electrosteel Steels, which, when read fully, show that a balanced approach is possible.
• It completely ignored two other binding judgments (D. Swamy and Pahwa Plastics) which had explicitly upheld the validity of the 2017 Notification.
• If the bench in the "Vanashakti Judgment" wanted to disagree with these earlier judgments, it should have referred the matter to a larger bench instead of taking a contrary view.
• The consequences of the judgment are devastating-completed projects like the AIIMS hospital in Odisha and a greenfield airport in Karnataka would have to be demolished, causing a massive loss to the public exchequer and creating more environmental pollution from demolition waste.

2. Arguments of Respondents (Vanashakti, environmental activists):

• A review petition cannot act as an appeal. The court cannot re-examine the merits of the case.
• The principle of "Prior EC" is fundamental to environmental protection. Allowing ex-post facto clearance rewards violators and undermines the Precautionary Principle.
• Those who knowingly violate the law by starting projects without an EC must face the consequences.

Judgment and Reasoning

The court was divided 2:1, with the majority allowing the review and recalling the "Vanashakti Judgment."

1. Majority View (CJI B.R. Gavai & J. K. Vinod Chandran) - FOR ALLOWING REVIEW:

• Error Apparent on the Face of Record: The "Vanashakti Judgment" was based on an incomplete reading of precedents. It cited only those paragraphs that condemned ex-post facto EC but ignored subsequent paragraphs from the same judgments where the Court, in the specific facts of those cases, allowed projects to continue after imposing heavy penalties—adopting a "balanced approach."
• Ignored Binding Precedents: The judgment did not consider the rulings in D. Swamy and Pahwa Plastics, where co-ordinate benches of the Supreme Court had upheld the 2017 Notification. According to the principle of Judicial Discipline, a bench of equal strength is bound by earlier decisions. If it disagrees, it must refer the matter to a larger bench. By not doing so, the "Vanashakti Judgment" was rendered per incuriam (decided in ignorance of a binding law).
• Devastating Consequences: The majority emphasized the real-world impact of the judgment. Demolishing large, otherwise permissible projects like hospitals and airports, only to rebuild them after obtaining an EC, is illogical, economically wasteful, and counter-productive for the environment.
• Restoration for Fresh Hearing: The majority did not finally decide the validity of the 2017 Notification or the 2021 OM. It only recalled the "Vanashakti Judgment" and restored the original writ petitions for a fresh hearing before an appropriate bench.

2. Dissenting View (J. Ujjal Bhuyan) - FOR DISMISSING REVIEW:

• No Ground for Review: The dissenting judge held that the petitioner was essentially asking for a reappreciation of the law, which is not the purpose of a review petition.
• Ex-Post Facto EC is an Anomaly: He strongly reaffirmed that the concept of ex-post facto EC is an "anathema" (something that is vehemently disliked and cursed) to environmental law. It violates the Precautionary Principle and the principle of Sustainable Development.
• Later Judgments are Per Incuriam: The judge reasoned that the judgments in Electrosteel, Pahwa Plastics, and D. Swamy (which allowed ex-post facto EC) were themselves per incuriam because they failed to follow the clear ratio laid down in the earlier, binding judgments of Common Cause and Alembic Pharmaceuticals.
• Principle of Non-Regression: Allowing ex-post facto clearance is a step back (regression) in environmental jurisprudence, which must always progress towards greater protection.

Final Order

The Review Petition was ALLOWED by a 2:1 majority. The "Vanashakti Judgment" dated May 16, 2025, was recalled. The original Writ Petitions and the connected Civil Appeal were restored to the court's files to be heard afresh.